The Crazy Story Behind The Creation Of The Term “Unicorn”

It’s often hard to figure out the provenance of words – they’re passed around, modified, and can get lost in the confusing maze of history and time. But every once in a while, it’s possible to pin down the exact moment a new word was created.

One such word is unicorn. Until a few years ago, unicorn didn’t mean anything – not to startups and entrepreneurs, anyway. A unicorn was a mythical creature with a white coat and a horn, found in mythology and children’s books. Today, it’s something every startup aspires to be.

Over the last couple of years, a unicorn has come to mean a very specific sort of startup – one that’s valued over a billion dollars (Rs. 6,800 crore). The analogy is clear – startups with a valuation greater than a billion dollars don’t come by very often, much like the elusive unicorn.

And the connect was was made for the first time by Aileen Lee, a Venture Capitalist in Silicon Valley. On 2nd November 2013, she wrote a post on TechCrunch. It was titled “Welcome To The Unicorn Club: Learning From Billion-Dollar Startups”

It was a fine post – it went into the details of the startups that were valued at greater than $1 billion, and tried to find trends and patterns. But what what struck out the most about the post was the use of the word unicorn.

The term exploded immediately, and in spite of the blog being published early on a Saturday morning, generated a blizzard of tweets and blog posts from tech investors and founders. Many chose to adopt the word to describe such startups. Aileen Lee had managed to capture the zeitgeist of the valley in one succinct word – it was late 2013, and billion dollar startups were springing up everywhere. Now instead of saying “billion dollar startups”, people have a convenient way to describe them.

And Lee hadn’t arrived at the word unicorn immediately. She’d considered several other terms, including “home run” and “megahits”. Then she thought of unicorn. “It felt right,” she said. “Readable and fun and not a word that had been used before to describe this.”

And fun it was. Within two months of its first use, the term had gone mainstream. In January the next year, it was on the cover of Fortune, and soon was being used everywhere – in the press, with investors, and with startups themselves.

Curiously, Lee received very little credit for her linguistic discovery. Her firm, Cowboy Ventures, tried to set the record straight. Soon after the term went mainstream, it came up with a section on its site titled “Unicorn Handling Guide.” It stated that since Cowboy Ventures had first come up with the term, they would “appreciate” if anyone using it could cite either the original TechCrunch article, or include a link to their site.

As you’d expect, that plea fell on deaf ears. Lee had given the world a new word, and the public ran with it. It was used in tweets, in blogposts, in investor meetings. And very few mentioned that it was Lee’s original creation.

Today, Aileen Lee’s contribution to advancing startup jargon is all but forgotten. She’s still running Cowboy Ventures, and is actively investing in startups. She’s working with companies and entrepreneurs, trying to turn them into unicorns. And they probably don’t even know she came up with the word.